Britain is campaigning to tighten the EU's code of conduct on arms sales to authoritarian regimes in return for endorsing the Franco-German drive to lift the European embargo on weapons exports to China - imposed after the Tiananmen Square massacres in 1989.

If agreed later this year the code's tighter rules would require all EU states to tell each other about such sales in future - to prevent cheating and to make sure that suspect states do not construct banned systems through a series of one-off component purchases.

Under the code, member states have a duty to ensure that weapons they sell are not used for internal repression, external aggression or where serious human rights violations have occurred.

Beijing is using next week's visit by the foreign secretary, Jack Straw - details of which emerged yesterday - to highlight the prospect that the 1989 embargo will finally be lifted this summer.

Such a move would anger human rights groups which monitor internal repression in the 1.3bn-strong People's Republic, and potentially the US, which fears the leakage of high technologies to China as well as the simmering threat to reincorporate Taiwan by force. Japan is also concerned by what it regards as growing hostility and military mobilisation on the part of its neighbour.

Britain is not opposed to lifting the embargo, but wants it "done properly" in ways that would prevent EU states being played off against each other in the lucrative Chinese military market - or jeopardise the stability of the region.

"If the embargo is lifted all information about export licences would be shared to ensure greater transparency under the code," one Whitehall official said.

Officials also stress that the code - which already governs exports to sensitive states such as Syria, Iran and North Korea - is compatible with US arms transfer policies and specifically forbids sales that undermine regional stability or threaten friendly states. That would clearly cover Taiwan.

But unlike the embargo, it is not legally binding. Last autumn a coalition of 55 European charities and campaign groups warned that it was vague, contained big loopholes and was not strong enough.

"The only penalty is political fallout and it does not have the same impact as breaking an embargo," a spokesman for Amnesty said.

"The ban was put into place as a reaction to human rights abuses in China and abuse has continued since then. What's being considered are the economic advantages."